Illinois Public Media News

WILL - Illinois Public Media News - January 18, 2011

Durbin: AZ Shootings Could Prompt Action on Mental Health, Gun Laws

Illinois' senior Senator, Dick Durbin, says concrete action can come out of the recent shootings at a congressional event in Tucson Arizona. The attack that killed six people and critically injured U.S. Rep. Gabrielle Giffords (D-Ariz) has led to a flurry of proposals in reaction, from gun control measures to a clampdown on incivility in politics. In an interview with Illinois Public Media's Tom Rogers, Durbin said he thinks some of those ideas can progress beyond the talking stage.

(Photo by Sean Powers/WILL)

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WILL - Illinois Public Media News - January 18, 2011

Tuscola Loses Out on Bid to Host Historic Steam Engine

Tuscola lost out on its bid Tuesday to host a steam locomotive that would have traveled through a dozen communities in Illinois and Iowa.

Online voting for the contest through Union Pacific Railroad ended Monday night. In addition to Tuscola, other cities in the running included Little Rock, Ark., Boise, Idaho, and Baton Rouge, La.

Little Rock came out on top in the contest with 76,217 votes, narrowly defeating Tuscola by a little more than 3,000 votes. That means the steam engine will follow a route that starts in Kansas City, Mo., traveling east to Boonville, Jefferson City, Chamois and St. Louis before heading south to Cape Girardeau, Dexter and Poplar Bluff. It will continue through Bald Knob, Ark., before concluding in Little Rock.

According to Union Pacific Railroad, the engine is the last steam locomotive built for the rail company. It was placed in freight service in Nebraska from 1957 to 1959, then was saved from being scrapped in 1960.

Brian Moody, the executive director of Tuscola Economic Development Inc., admitted he was surprised Tuscola, with a population of around 4,500 people, got as far as it did in the competition.

"For our small community to even be competing with these much larger communities," Moody said. "It's kind of a big David and Goliath. We came up a little bit short, and that's ok."

Tuscola is a central point for three different railroads, including CSX, Canadian National, and Union Pacific. Moody said thanks to the national publicity from the contest, Tuscola city officials have been contacted in recent weeks by people who are interested in railroads, and he thinks some of those "railroad enthusiasts" might be encouraged to visit Tuscola.

"We knew there were railroad enthusiasts who had a lot of interest in Tuscola because of the unique characteristics in our rails," he said. "This kind of gave us the opportunity to demonstrate to them that we were as enthusiastic about those things as they were."

Moody said moving forward, Tuscola will focus on how it can take advantage of its rail services to boost tourism. He also noted that the city will keep an eye out on other similar competitions.

(Photo courtesy of Union Pacific Railroad)

Categories: Economics, Transportation

WILL - Illinois Public Media News - January 14, 2011

Illinois State Board of Education Approves Education Funding Request

The Illinois State Board of Education (ISBE) has approved a budget proposal for next year that it will send to lawmakers in Springfield.

After the General Assembly passed a massive 67-percent income tax hike, it is uncertain how Governor Pat Quinn and the legislature will respond to the request. The ISBE is asking for $709.4 million in additional state support for Fiscal Year 2012. Board of Education spokeswoman Mary Fergus said she is "cautiously optimistic" that the funding request will be approved.

Fergus explained that in formulating the proposal, the ISBE considered feedback from the public and the state's Education Funding Advisory Board, which pushed for a much larger $4 billion increase in education funding.

"We know the economic reality is not going to support that," she said.

State support for education has plunged in the last couple of years by about $450 million.

A bulk of the money requested by the ISBE would support General State Aid and mandated categoricals that have seen cuts, like transportation funding. Also included in the budget request is a $3.5 million increase for bilingual education, a $2.3 million increase to improve teacher training programs, and a $900,000 increase in the amount of funding for feasibility studies as school districts consider consolidations.

"We're not really talking about expanding a lot of programs," Fergus said. "Some of this increase will go toward a little bit of expansion, but really this is about restoring funds."

The Illinois State Board of Education will include its budget recommendation as part of the overall Fiscal Year 2012 state budget.


WILL - Illinois Public Media News - January 13, 2011

Ill. Tax Increases: The Beginning of an Exodus, or Just Another Annoyance?

A University of Illinois economist doesn't predict a long line of businesses leaving the state because of higher income taxes, but he said Illinois remains an uncertain place for commerce and industry.

Daniel Merriman of the Illinois Institute of government and Public Affairs said neighboring states had already begun to lure away employers concerned about Illinois' uncertain deficit situation even before lawmakers passed a 67 percent hike in personal income taxes this week. Governor Pat Quinn signed the increase into law Thursday afternoon.

Merriman said the tax increase will be one more drawback, but it still won't be enough to address all the red ink in Springfield.

"A combination of tax increases, expenditure reductions and growth is necessary to eliminate it," Merriman said. "The taxes actually do help reduce the deficit. It's just that it hasn't done enough to fully eliminate it, and they're still going to have to have expenditure reductions along the way."

Merriman said lawmakers still haven't addressed structural problems either, like fixing the underfunded pension system or revamping Medicaid and workers' compensation laws. But he said employers are not as mobile as some would believe - noting that most firms are rooted in the state and serve mainly Illinois customers.

Then there is the question of the region's overall economic health. Merriman said the pressure facing manufacturers in Illinois would face them wherever they relocate.

"A lot of the concern that people have had with the kind of business loss in Illinois has been with manufacturing establishments that have been leaving the entire Midwest, and to some extent they're just leaving the country as a whole," he said. "So it's not clear that Illinois is going to be losing that much to neighboring states. It's that manufacturing just isn't as strong as it used to be.


AP - Illinois Public Media News - January 13, 2011

Quinn Signs Major Tax Increase into Law

If you live in Illinois, your taxes have now gone up 67 percent. Governor Pat Quinn has signed the income tax package into law.

The government will get a bigger cut of your next paycheck. Illinois' flat income tax rate is now 5 percent, up from 3 percent. Someone making 40 thousand dollars a year will now pay another 800 dollars in state taxes, not counting deductions or federal tax breaks.

It will stay that way for at least four years when the rate is scheduled to go down. The corporate rate jumps from 4.8 percent to 7 percent, with a similar reversion in four years.

Democrats passed the measure in the wee hours Wednesday morning, among the final acts of the lame duck session. The move is meant to help close a $15 billion budget deficit that threatens to cripple state government.

Governor Pat Quinn says Illinois' fiscal house was burning. "We have an emergency, a fiscal emergency," Quinn said. "Our state was careening towards bankruptcy and fiscal insolvency."

The increase is retroactive, covering all wages earned since Jan. 1 of this year.

Republican legislators are already trying to get the law repealed, and governors of other states are lining up to lure Illinois' businesses, upset that the corporate tax rate is also going up.

(Additional reporting from The Associated Press)


WILL - Illinois Public Media News - January 12, 2011

Republican Lawmakers Push for Income Tax Repeal

Democratic leaders are fresh off their victory in getting an income tax hike through both chambers of the Illinois General Assembly, but now Republicans in the state Senate are challenging the legislation by calling for its repeal.

State Senator Matt Murphy (R-Palatine) joined his fellow GOP lawmakers in voting against the tax hike, and he is now crafting legislation to repeal the tax increase. Murphy said he is confident an ample number of his colleagues will support the plan, noting that Republicans have more seats in the new legislature. He also said several of the Democratic Senators who voted against the tax hike will continue serving.

"Do I expect the Senate President to allow this bill to move, or the Speaker, or the Governor to sign it?" Murphy said. "I don't, but nobody ever got somewhere by saying I might as well not get started because it probably won't happen."

The legislation calls for a 67-percent increase in the state's income tax along with a spike in the corporate tax. Murphy said the move will cost the state jobs.

It is eliminated that Illinois' budget deficit could reach $15 billion this year. State Senator Dale Righter (R-Mattoon), who serves as the Senate's deputy minority leader, said a tax increase is not something he would make a pledge to block in every situation, but he said in this case, lawmakers have failed to go through the budget line-by-line, and make cuts.

"The tax increase was wrong in the first place," Righter said. "I think it's going to make things worse. It's going to fuel more government spending, and it's going to lead to greater job loss and diminish economic activity."

Governor Pat Quinn says he will sign the income tax legislation, calling it a necessary step to generate revenue.

"It's important for the state government not to be a fiscal basket case, and that's what I confronted when I arrived," Quinn said. "I've said for two years, I said it in campaigns, we needed to restrain spending. We have. And we also need revenue to pay these overdue bills. And we will.


AP - Illinois Public Media News - January 12, 2011

Walker Uses Ill. Tax Increase to Bolster Wisconsin

Gov. Scott Walker tried to take full advantage of Illinois lawmakers passing dramatic tax increases Wednesday, saying Wisconsin would welcome any businesses from its neighboring state that care to relocate.

Absent from Walker's sales pitch was the fact that Wisconsin's top income tax rates remain higher than Illinois even under the increase.

Even so, the Republican Walker was reveling in drawing a comparison between Illinois, which has a Democratic governor, and his agenda to cut taxes.

"Years ago Wisconsin had a tourism advertising campaign targeted to Illinois with the motto, 'Escape to Wisconsin,'" Walker said in a statement. "Today we renew that call to Illinois businesses, 'Escape to Wisconsin.' You are welcome here."

Walker referenced Illinois' problem in a speech to business leaders on Tuesday, issued a statement hours after the tax increase vote on Wednesday and then called a news conference to talk about it as well.

Wisconsin lawmakers were picking up on it as well. Rep. Robin Vos, R-Caledonia, said he welcomed any chance to "kind of stick it to them" in Illinois. He said lawmakers there raising taxes played right into Walker's hands.

And while income tax rates are higher in Wisconsin, corporate income taxes in Illinois would be higher.

Wisconsin has a graduated income tax rate that goes from 4.6 percent to 7.5 percent. Illinois has a flat rate that would increase from 3 percent to 5 percent under the move passed by the Legislature to help plug a $15 billion budget hole. Lawmakers there also approved raising the state's corporate income tax rate, effectively moving it from 7 percent to 9.5 percent. Wisconsin's rate is 7.9 percent.

Walker hasn't yet proposed lowering the state's income or corporate tax rates. But he has called for eliminating taxes for companies that move to Wisconsin from Illinois or anyplace else. He also wants to cut taxes on small businesses already in the state. He argues that those moves, along with lawsuit and regulatory reforms, will make Wisconsin a more attractive place to do business.

Vos, co-chairman of the Legislature's budget committee, said he wants to change Walker's small business tax cut proposal into a $1,000 income tax credit to companies for every job created in the state. The Legislature could vote on the tax cut proposals as soon as next week.

The key is that Wisconsin is moving toward lowering taxes while Illinois is raising them, said James Buchen, a vice president at Wisconsin Manufacturers and Commerce, the state's largest business group.

"It just makes Wisconsin look more attractive relative to our neighbor to the south," Buchen said.

Walker has adopted the mantra that "Wisconsin is open for business" and has repeated it at nearly every turn ever since his election in November. He's pledged to add 250,000 jobs in Wisconsin by 2015.

Wisconsin faces a two-year $3 billion budget shortfall. Walker has said his budget, which will be released next month, will balance even with the business tax cuts he's already proposed.

While Walker's talking about taking jobs away from Illinois, Wisconsin's neighbor has already tried to woo Talgo Inc., a train maker that said it will move its manufacturing jobs out of Milwaukee next year because the state rejected federal funds for high-speed rail.

Talgo spokeswoman Nora Friend said Illinois's tax structure would be one of many factors in determining whether the company would relocate its manufacturing there.

"Illinois is still a very strong state because of its strong supply chain and strong will to expand its rail plan," she said Wednesday. "Our analysis includes a lot of factors. (The tax situation) would not weigh in as a positive but it's difficult to say whether it's the deciding factor. It would be one more factor that gets weighed in."

She said Illinois, Washington and Florida are among the top three candidates for Talgo's new site.

Categories: Business, Economics, Government

WILL - Illinois Public Media News - January 12, 2011

Ill. Lawmakers Look Ahead at Higher Ed. Budget Plan

In the 11th hour of the 96th General Assembly, lawmakers in Springfield passed an income tax increase, which could chip away at unpaid bills to the state's universities.

But there is another measure in the Illinois House that will be introduced later this year sponsored by Rep. Chapin Rose (R-Mahomet) and Rep. Chad Hays (R-Daville) that seeks to improve the economic outlook for higher education without raising taxes.

"How do we work together in a way that makes sense to do a better job with limited resources?" Hays said. "This is one small step in that direction, and my hope would be that we're having many of these conversations as we go forward."

The legislation would create a moratorium on new, unfunded mandates on state universities. University of Illinois spokesman Tom Hardy said even public policy with the best intentions can lead to mandates which make it difficult for universities to operate in a cost-effective way.

"You know, unfunded mandates that gets talked about frequently are tuition waivers," Hardy said. "That's something that should be looked at to free up potentially millions of dollars in tuition waivers that public universities across the state are funding."

The University of Illinois system is waiting on $413 million in reimbursements from the state. It has explored ways to improve its budget situation through furloughs, department consolidations, and a tuition hike. The U of I's Board of Trustees is slated to vote Jan. 20 on a series of fee increases for its students.

Hays noted that another important part of the legislation includes a provision that would create a single procurement officer who would coordinate purchases for every university in the state.

He added that the legislation was influenced by the recommendations of officials at the University of Illinois and Eastern Illinois University, and he expects the measure to be introduced in the spring.


AP - Illinois Public Media News - January 12, 2011

Ill. Lawmakers Pass Income Tax Increase

Democrats in the Illinois Legislature on Wednesday approved a 66 percent income-tax increase in a desperate and politically risky effort to end the state's crippling budget crisis.

The increase now goes to Democratic Gov. Pat Quinn, who supports the plan to temporarily raise the personal tax rate to 5 percent, a two-thirds increase from the current 3 percent rate. Corporate taxes also would climb as part of the effort to close a budget hole that could hit $15 billion this year.

The higher taxes will generate about $6.8 billion a year, Quinn's office said - a major increase by any measure. In percentage terms, 66 percent might be the biggest increase any state has adopted while grappling with recent economic woes.

It will be coupled with strict 2 percent limits on spending growth. If officials violate those limits, the tax increase will automatically be canceled. The plan's supporters warned that rising pension and health care costs probably will eat up all the spending allowed by the caps, forcing cuts in other areas of government.

Other pieces of the budget plan failed.

Lawmakers rejected a $1-a-pack increase in cigarette taxes, which would have provided money for schools. They also blocked a plan to borrow $8.7 billion to pay off the state's overdue bills, which means long-suffering businesses and social-service agencies won't get their money anytime soon.

House Speaker Michael Madigan, sounding weary, said Republicans should have supported some parts of the plan instead of voting against everything.

"They're on the sidelines. They don't want to get on the field of play," the Chicago Democrat said. "I'm happy that the day has ended."

But Republicans noted they were not included in negotiations. They also fundamentally reject the idea of raising taxes after years of spending growth.

"We're saying to the people of Illinois, 'For eight years we've overspent, now we're going to make it your problem,'" said Rep. Roger Eddy. "We're making up for our mistakes on your back."

The increase means an Illinois resident who now owes $1,000 in state income taxes will pay $1,666 at the new rate. After four years, the rate drops to 4 percent and that same taxpayer will then owe $1,333.

Republicans predict the tax eventually will be made permanent.

"It's a cruel hoax to play on citizens to say this is temporary," said House Minority Leader Tom Cross, R-Oswego.

Democrats bristled at the idea that they are to blame for the state's financial problems, although they've controlled the governor's office and both legislative chambers since 2003.

They said some parts of the problem began under Republican governors and that Republicans backed some of the budgets that increased spending. They argued the national recession sent state revenues into a nosedive and that Democrats already have cut spending by billions of dollars.

"This mess is a mess that is the responsibility of all of us as Republicans and Democrats, of several different governors and part of the mess isn't even anybody's fault," said House Majority Leader Barbara Flynn Currie, D-Chicago.

The new tax money will balance the state's annual budget and let officials begin chipping away at the backlog of unpaid bills. Borrowing money, and then repaying it with a portion of the tax increase, would have allowed those bills to be paid immediately, aiding organizations that provide services for the state but go months without being reimbursed.

The delay and the spending limits are "very troubling" to groups pushing for the state to come up with money to pay its bills, said Sean Noble, policy director for Voices for Illinois Children, a member of the statewide Responsible Budget Coalition. Still, he called the tax increase "an enormous step" toward putting Illinois on sound financial footing.

The proposal passed the House on Tuesday night by a vote of 60-57, the bare minimum. No Republicans backed the measure there or in the Senate, where the measure passed 30-29.

Legislative leaders were eager to pass the plan before a new General Assembly was sworn in Wednesday, taking a slice out of the Democratic majority and removing lame-duck lawmakers who might be willing to support the tax before leaving office.

The governor has refused to discuss the tax proposal publicly, although his aides say he supports it. During his election campaign, Quinn promised to veto any tax plan that was higher than his proposal for a 1-point increase.

Early Wednesday, Quinn's office called the approved measure "strong action" that will strengthen the budget and actually help the state economy.

Republicans accused Democrats of doing irreparable harm to Illinois families and businesses. Business leaders decried the proposal as a job-killer.

"Based on this particular legislation the only businesses that will benefit are the moving companies that will be helping many of my members move out of this particular state," said Gregory Baise, head of the Illinois Manufacturers' Association.

"This is the nuclear bomb of jobs bills," said Sen. Dan Duffy, R-Lake Barrington.

Democrats countered that even with the increase, Illinois' tax rate will be lower than in many neighboring states - Iowa's top rate is 8.98 percent, Wisconsin's is 7.75 percent. They also maintain that without more money, state government may not be able to pay employees by the end of the year. Major government services might have to be halted, they warn, and groups waiting for state payments will go under.

"The wolf is at the door, ladies and gentleman," said Rep. Greg Harris, D-Chicago.

Spending limits were added to the plan to win the support of some suburban Democrats. Republicans said the limits don't do enough to clamp down.

The limits allow next year's spending to increase considerably so the state can make its required contribution to government retirement systems, pay overdue bills and cover other costs that had been shoved aside. After that, however, spending could not grow more than 2 percent annually for the next three years or else the tax increase would be reversed.

"We're really trying to handcuff ourselves and the governor in our spending," said Illinois Senate President John Cullerton, a Chicago Democrat.

Categories: Economics, Government, Politics

AP - Illinois Public Media News - January 11, 2011

Illinois House Passes Massive Tax Increase

A major increase in state income taxes has squeaked through the Illinois House as lawmakers search for a way to solve a historic budget crisis.

The tax would set the personal tax rate at 5 percent, up from 3 percent now. That would be a 67 percent increase. Corporate taxes would climb, too.

Gov. Pat Quinn's office says the tax increase would generate about $6.8 billion a year.

The increase passed 60-57. It now goes to the state Senate, which could still vote Tuesday night.

Categories: Economics, Government, Politics

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